Oregon Potato Company v. Kinsale Insurance Company

CourtDistrict Court, E.D. Washington
DecidedMay 5, 2023
Docket2:22-cv-00049
StatusUnknown

This text of Oregon Potato Company v. Kinsale Insurance Company (Oregon Potato Company v. Kinsale Insurance Company) is published on Counsel Stack Legal Research, covering District Court, E.D. Washington primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Oregon Potato Company v. Kinsale Insurance Company, (E.D. Wash. 2023).

Opinion

1 2

3 4 5 UNITED STATES DISTRICT COURT EASTERN DISTRICT OF WASHINGTON 6

7 OREGON POTATO COMPANY, a Washington Company, NO. 2:22-CV-0049-TOR 8 Plaintiff, ORDER GRANTING DEFENDANT’S 9 MOTION FOR PARTIAL v. SUMMARY JUDGMENT 10 KINSALE INSURANCE 11 COMPANY, a foreign corporation,

12 Defendant. 13 14 BEFORE THE COURT are Defendant’s Motion for Partial Summary 15 Judgment on Occurrence of Limit of Liability Endorsement (ECF No. 36) and 16 Plaintiff’s Cross-Motion for Partial Summary Judgment (ECF No. 39). These 17 matters were submitted for consideration with oral argument. However, the Court 18 determined that oral argument was unnecessary. LCivR 7(i)(3)(B)(iii). The Court 19 has reviewed the record and files herein, and is fully informed. For the reasons 20 discussed below, Defendant’s Motion for Partial Summary Judgment on 1 Occurrence of Limit of Liability Endorsement (ECF No. 36) is granted and 2 Plaintiff’s Cross-Motion for Partial Summary Judgment (ECF No. 39) is denied.

3 BACKGROUND 4 This arises from a first-party property insurance excess coverage dispute. 5 See ECF No. 1-2 at 2. On January 11, 2022, Plaintiff filed a Complaint in Grant

6 County Superior Court for (1) declaratory judgment, (2) breach of contract, (3) 7 insurance bad faith and breach of the covenant of good faith and fair dealing, (4) 8 violation of Washington’s Unfair Claims Settlement Practices Act (WAC 284-30 9 et seq.) and Consumer Protection Act (RCW 19.86), and (5) reservation to assert

10 claims for violation of Washington’s Insurance Fair Conduct Act (RCW 11 48.30.015). See id. at 6–9. On March 17, 2022, Defendant removed the action to 12 this Court. ECF No. 1. Except where noted, the following facts are not in dispute.

13 Oregon Potato Company (“OPC”) is a Washington corporation 14 headquartered in Pasco, Washington that processes vegetable products and has a 15 facility in Warden, Washington. ECF No. 37 at 1–2, ¶¶ 1–2, 4. Kinsale Insurance 16 Company is an Arkansas corporation headquartered in Virginia. Id. at 2, ¶ 3.

17 On January 21, 2021, a fire destroyed or damaged OPC property in Warden. 18 Id., ¶ 5. OPC purchased first-party property insurance covering its properties. Id., 19 ¶ 6. The fire occurred during OPC’s July 1, 2020 to July 1, 2021 coverage period.

20 Id., ¶ 7. 1 OPC’s property insurance during the policy period was written in three 2 layers, with the following insurers taking the respectively-shown positions and

3 percentages: (1) Liberty Mutual covers 100% of the primary layer for $0 to 4 $10,000,000; (2) CM Vantage (50%), Swiss Re (33.33%), and AIG (16.67%) 5 cover the first excess layer for $10,000,000 to $25,000,000 for the shares shown in

6 their respective parentheses; and (3) Tokio Marine (50%), Partner Re (10%), RSUI 7 (20%), and Kinsale (20%) cover the second excess layer for $25,000,000 to 8 $50,000,000 for the shares shown in their respective parentheses. Id. at 2–3, ¶ 8. 9 OPF disputes these amounts to the extent that no insurers (except Swiss Re)

10 express liability as a percentage of their respective layers: here, Kinsale expresses 11 liability as “$5,000,000 Part of $25,000,000 Excess of $25,000,000 Per 12 Occurrence.” ECF No. 47 at 3, ¶ 2.

13 When OPC obtained the insurance, it represented to Liberty Mutual that the 14 following sub-locations at OPC’s Warden facility had the following estimated 15 values: (1) Receiving/Processing/DHF/Cold Storage/Office sub-location building 16 at $25,100,000, personal property at $175,000, and loss of income at $13,000,000;

17 (2) Cold Storage Freezer sub-locations building at $5,802,451; (3) Waste Plant 18 sub-location at $612,828; and (4) Dry Storage & Shop sub-location at $1,536,000. 19 ECF No. 37 at 3, ¶ 10.

20 Kinsale’s policy contains the following Insuring Agreement: 1 1. The company will indemnify the Insured for our share, as shown in Item 1 of the Declarations Page of this Policy, of the Ultimate Net 2 Loss caused by the direct physical loss or damage to Covered Property in excess of the Primary and Underlying Excess Insurance as 3 shown in the Schedule of Underlying Insurance of this Policy, occurring during the policy period. This agreement is subject to the 4 following terms, conditions and any endorsements to this Policy.

5 2. Applications of the Underlying Provisions – Follow Form:

6 The coverage or perils insured in this Policy are subject to the terms, conditions, definitions, limitations, exclusions, and warranties 7 contained in the policy(ies) of the Primary Insurer(s) as shown in the Schedule of Underlying Insurance of this Policy to the extent there is 8 no conflict with this Policy. In the event the terms, conditions, definitions, limitations, exclusions, warranties, or any other provisions 9 contained in the Primary and Underlying Excess Insurance of this Policy, respectively, are inconsistent or conflict with the terms of this 10 Policy, this Policy shall apply ….

11 3. Attachment of Liability:

12 It is expressly agreed that our liability under this Policy shall attach to the Company only after the Primary and Underlying Excess Insurer(s) 13 have paid or have been held liable to pay the full amount of their respective Ultimate Net Loss. 14

15 Kinsale’s policy contains the following Limit of Liability Clause:

16 Provided always that the liability of the Company applies only after the Primary Insurer(s) have agreed to pay the full amount of their 17 respective Ultimate Net Loss, then the Company shall be liable to pay our share of the Ultimate Net Loss up to the full amount of the Limit 18 of Liability as specified in Item 1. Of the Declarations Page of this Policy. The maximum recovery in any one occurrence for any 19 coverage subject to a sub limit shall be that sub limit provided by the Primary and/or Underlying Excess Insurance …. 20 1 ECF No. 37 at 5, ¶ 14. 2 Kinsale’s policy defines “Ultimate Net Loss” as follows:

3 Ultimate Net Loss shall mean the actual loss sustained by the Insured as a direct physical result of the peril(s) insured against by the 4 policy(ies) of the Primary and/or Underlying Excess Insurer(s) limited by: 5 a. Any sub limited contained within this Policy or the policy(ies) of 6 the Primary and/or Underlying Excess Insurer(s), and

7 b. Making deductions for any salvage and recoveries from any source other than this Policy and the policy(ies) of the Primary and/or 8 Underlying Excess Insurer(s).

9 Id., ¶ 15. 10 Kinsale’s policy contains an “Occurrence Limit of Liability Endorsement” 11 (“OLLE”): 12 It is understood and agreed that the following terms and conditions apply this Policy: 13 1. The Limit of Liability as specified in Item 1 of the Declarations 14 page is a limit per occurrence. Notwithstanding anything to the contrary within this Policy, in no event shall the liability of this 15 Company exceed this Limit of Liability in one disaster, casualty, or event, irrespective of the number of locations involved. 16 Occurrence shall mean any one direct physical loss, disaster or 17 casualty or series of direct physical losses, disasters or casualties arising out of one event which occurs within the policy period and 18 territory ….

19 2. The Premium for this Policy is based upon the Statement of Values, on file with the Company, or attached to this Policy. In 20 event of loss under this Policy, liability of the Company shall be limited to the least of the following: 1 a. The actual adjuster amount of loss, less applicable 2 deductible(s).

3 b.

Free access — add to your briefcase to read the full text and ask questions with AI

Related

Anderson v. Liberty Lobby, Inc.
477 U.S. 242 (Supreme Court, 1986)
Scott v. Harris
550 U.S. 372 (Supreme Court, 2007)
Robin Orr v. Bank of America, Nt & Sa
285 F.3d 764 (Ninth Circuit, 2002)
Rhod-A-Zalea & 35th, Inc. v. Snohomish County
136 Wash. 2d 1 (Washington Supreme Court, 1998)
State v. McCollum
17 Wash. 2d 85 (Washington Supreme Court, 1943)
LES Realty Trust v. Landmark American Insurance
977 N.E.2d 566 (Massachusetts Appeals Court, 2012)
Trident Seafoods Corp. v. Commonwealth Insurance
850 F. Supp. 2d 1189 (W.D. Washington, 2012)

Cite This Page — Counsel Stack

Bluebook (online)
Oregon Potato Company v. Kinsale Insurance Company, Counsel Stack Legal Research, https://law.counselstack.com/opinion/oregon-potato-company-v-kinsale-insurance-company-waed-2023.